WASHINGTON Household debt fell at a 0.4 percent annual rate in the first quarter of 2012 and household wealth increased by $2.8 trillion, the Federal Reserve said on Thursday.
It was the sixteenth straight quarter of declining household debt, suggesting the country's deleveraging process continues.
The Fed also revised prior readings on credit, which had initially showed household debt expanding in the fourth quarter.
In the first quarter, households continued to shed mortgage debt, which makes up the majority of their liabilities. It declined at a 2.9 percent annual rate, the biggest drop since the second quarter of 2011.
Consumer credit increased by 5.8 percent during the January-March period.
A jump in the value of financial assets pushed household net worth higher to $62.9 trillion, also boosted by a modest increase in the value of household real estate.
Households have struggled to rebuild their net worth after the country's housing bubble popped and triggered the 2007-2009 recession.
The Fed also released substantial downward revisions to its estimates of the amount of cash held by corporations over the last few years.
Non-financial corporate businesses held $1.737 trillion in liquid assets, such as cash, in the first quarter, up from $1.724 trillion in the previous quarter, the data showed.
The Fed had previously estimated holdings of around $2.2 trillion in the fourth quarter. Still, even with the revisions, corporations still appear to be increasing their cash holdings, suggesting they are still leery about investing.
(Reporting by Jason Lange; Editing by Neil Stempleman)